Question: Please solve it in the given excel template and show excel calculations. Options and Futures A. Your employer is offering you stock options on the

Please solve it in the given excel template and show excel calculations.

Please solve it in the given excel template and show excel calculations. Options and Futures A. Your employer is offering you stock options on

Options and Futures A. Your employer is offering you stock options on the firm as part of your pay package. You know the following about this offer: Current Stock Price Exercise Price Maturity (yrs) Risk-free Rate Stock Volatility $23 $28 2 2.25% 23% What is the value of the option? Suppose the Fed reduces Treasury rates to 2.0%, what is the new price of the option? After the rate reduction, your company's share price rises to $25, what is the new price of the option? 1 a. Option Pricing Base Fed Price incr 2 3 Exercise price 4 Maturity 5 Stock price 6 Risk free rate 7 Volatility 8 BS calculations: 9 d1 10 N(dl) 11 d2 12 N(2) 13 Price of call #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0

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